Poland has aligned itself with Germany on how to handle the recession.
“When I talk to European politicians who boldly tell me how much money they are going to pump into the economy, I pose the question, ‘Where do you have the money for that?’,” the Prime Minister of Poland told the Financial Times.
“I don’t think that borrowing money on a huge scale is a good method of resolving the crisis.”
Angela Merkel, the German chancellor, last week warned that increased borrowing to tackle what Brown insists on referring to as the 'downturn' could lead to further crisis.
Poland has 'announced an economic stabilisation package totalling 91bn zlotys (€24.1bn), although it contains almost no new spending. The major items were 60bn zlotys to revive the interbank market and a series of smaller measures to make it easier for Poland to gain access to European Union funds.' (Financial Times)
“The effects of this crisis are not particularly visible in Poland,” Mr Tusk said. “If there are negative effects, that is mainly because things are not always that good with our neighbours.”
Slower growth during 2009 - forecasts see it falling from 4.8 per cent to 3.7 per cent, are thought to be optimistic by the Governor of the Bank of Poland who suggests a growth rate of just under 3 per cent and a resultant revenue short fall of 1.7bn zlotys. (FT).
The Finance Minister, Jacek Rostowski, stated his resolve to keep the deficit unchanged at 18.2bn zlotys.
“I am determined investors, both Polish and foreign, should understand we shall maintain the health of Polish public finances and they can trust Poland, and particularly the Polish government, as a debtor....I see no advantage in increasing the deficit and just finding that this is chewed up by increased debt service payments.”
After the events of the early eighties and the gruelling experience of the negotiations with the Club of Paris and the Club of London, Poland knows what default feels like, and how ineffective are planned economies and state run banks in allocating market resources.
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